March 20 (Bloomberg) -- Asia will be able to take in more
aircraft as economic growth and a population of more than 3
billion people will sustain travel demand, said Tony Fernandes,
head of AirAsia Bhd., the region’s biggest low-fare carrier.

Asia, which has 10 times the population of the U.S., has
about a third of the number of aircraft, Fernandes, group chief
executive officer of AirAsia, said in a Bloomberg Television
interview at the Credit Suisse Group AG Asian Investment
conference in Hong Kong. “So it can take a lot of planes.”

The comments come after Indonesian budget carrier PT Lion
Mentari Airlines ordered 234 aircraft from Airbus SAS this week
-- its second commitment to purchase more than 200 planes in two
years -- stoking concerns of overcapacity in Asia. More than a
dozen budget airlines began operations in Asia-Pacific in the
past 15 years as economic growth in China, India and Southeast
Asia enables more people to fly for the first time.

“The Asia-Pacific aviation industry is still booming,”
Angeline Chin, a Kuala Lumpur-based analyst with Alliance
Research Sdn., said by e-mail. “Nonetheless, we believe
industry may need to adopt a more disciplined approach to
capacity in the near-to-medium term.”

The growing population in Asia is expected to help fill the
planes, said Fernandes, whose AirAsia group expects to carry 43
million passengers this year. Eleven years ago, the airline
carried 200,000 passengers, he said today.

“I wouldn’t say there are too many planes in Asia,”
Fernandes said. “We have 500 planes and we fly in six
countries. Lion Air is in Indonesia and a hybrid in Malaysia.
Asia can take the planes they have and we have.”

Low-Fare Airlines

Discount carriers have secured about a quarter of the
region’s air travel market in the past decade. The region will
account for 33 percent of global passengers in 2016, according
to the International Air Transport Association, and HSBC
Holdings Plc has said four out of five airports in Asia are
operating at or above their designated capacity.

AirAsia has grown into Asia’s biggest discount airline
since its takeover by Fernandes and partners in 2001. The
Sepang, Malaysia-based carrier has set up ventures in the
Philippines, Japan, Thailand, India and Indonesia.

Domestic Competition

In 2011, AirAsia ordered 200 Airbus A320neo aircraft valued
at $18 billion in the biggest order for the planemaker.

Lion Air, which serves more than 36 destinations, is
establishing a low-cost carrier in Malaysia to challenge
AirAsia, Airbus’s biggest A320 customer. Low-cost carriers are
increasing their fleet as air travel is expected to increase
more than 6.4 percent annually through 2031.

Lion Air already has 700 planes on order and expects to
have ordered 1,000 planes within “two to three years,”
President Rusdi Kirana said March 18. The Indonesian carrier
ordered 230 Boeing Co. 737 planes last year.

AirAsia plans to pick an engine for the 100 A320 planes it
ordered from Airbus by April 18, Fernandes said, without
elaboration.